On January 1, Year 1, Parker Company issued bonds with a face value of $80,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 9 percent at the time the bonds were issued. The bonds sold for $76,888. Parker used the effective interest rate method to amortize the bond discount.

Required

a. Prepare an amortization table like the one that follows. Round answers to nearest whole dollar.

b. What item(s) in the table would appear on the Year 4 balance sheet?

c. What item(s) in the table would appear on the Year 4 income statement?

d. What item(s) in the table would appear on the Year 4 statement of cash flows?

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Cash Interest Discount Carrying Payment Expense Amortization Value January 1, Year 1 December 31, Year 1 December 31, Year 2 76,888 6,400 6,920 520 77,408 ? ? ? December 31, Year 3 ? ? ? December 31, Year 4 December 31, Year 5 ? ? ? ? Totals 32,000 35,112 3,112